Proper pricing strategies are the base of a successful and profitable company. But how does a company determine which pricing strategies are best for them in their particular market and industry? According to American Express, some planning combined with four pricing tactics can help companies boost their profits and growth! As part of our business consulting program, Acara Partners advises our clients to work with similar pricing strategies for optimal profit.
- American Express suggests keeping your pricing simple by not utilizing symbols and punctuation. For example, seeing “$1,599.00” is more intimidating than seeing “1599.” Prices with symbols can come across as more complicated and expensive compared to prices without symbols.
- Ending your prices with a “9” such as “19.99” will improve sales without slashing your profit. This price strategy works because psychologically we feel like the item is more affordable ending with a “9” rather than a whole number like “20.”
- Price anchoring is another tactic to help boost profits. This strategy involves placing expensive items beside even more expensive items. When people see a less expensive item next to pricier products, they tend to think the less costly item is a great deal.
- Offering three price options, including the price that you actually want the customer to pay, will give the customers an option of which product they want to buy. A bargain price, the price you want them to pay and a luxury price are the three options a business should offer. More times than not, a customer will choose the “middle of the road” price.
Here at Acara Partners, we advise our clients to take these kinds of strategies into consideration when determining product pricing. We suggest looking into a competitor’s price for comparison and using predictive pricing for your company’s highest potential profit. Ensure your company’s success and high profits without turning off valuable with these tips and tactics!